Thus these requirements for the independence and financial expertise of the audit committee are very important. In the USA the standard setting body is NYSDE and in Australia is ASX.
In Australia the standards for the audit committee has been set for the audit committee under ASX's Principles of Good Corporate Governance and Best Practices Recommendations. The principle 4 of the POGCGBPR is giving directions for the audit committee requirements. As per Principle 4 the majority of the members of the audit committee should be non-executive directors, on independent charter and should be independent in all terms. This means they should not be involve with the company by the means of business or financial benefits. They should analyse all the issues individually and independently. So far the financial expertise is concerned then in Australia it is mandatory for all the members of the audit committee to have financial knowledge and experience. However, it is mandatory at least for the one member of the committee to have financial expertise based on education and past industry experience. If all these requirements have been fulfilled only then the audit committee is said to be meeting the fundamentals. . (MinterEllison Lawyers, 2003)